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Axios AM Deep Dive: The extreme weather threat

National

This year's extreme weather is a preview of even more turbulent times that will bedevil us for at least the span of a 30-year mortgage.

Why it matters: Extreme weather events are the clearest way we're feeling climate change in our daily lives, and they will reshape where and how we live, work and play. 

This year, we've already seen tens of billions in damage and more than 1,000 people dead in the U.S. and Europe alone.

The big picture: The geography of climate risk will transform desirable communities as homes and businesses quickly become uninsurable — and potentially uninhabitable — due to the escalating prevalence of wildfires, hurricanes and floods.

This is already happening in parts of California, due to wildfires, and coastal Florida because of hurricanes and coastal flooding. 

Heat waves, wildfires, droughts and floods can upend entire communities, cities and regions, hitting the most vulnerable populations among us the hardest. 

And these events are virtually assured for the next three decades, even if greenhouse gas emissions are immediately and sharply curtailed to reduce long-term warming, due to the inertia of the climate system. 

It will take several decades for the beneficial effects of emissions cuts to be noticeable, climate scientists told Axios.

Details: The 1.1°C (2°F) of average global warming since the preindustrial era has been enough to tip the scale toward more frequent and intense extreme events. 

So many off-the-charts weather events have happened this year — from the California wildfires to the Pacific Northwest heat wave and the record-setting New Jersey and New York City deluge — that scientists are questioning whether they've missed important tipping points.  

Precipitation extremes — both an overabundance and a lack of precipitation — are becoming more likely, more severe, and in some cases, longer-lasting, scientists have found. So too are heat extremes.

Researchers have also shown that hurricanes are dumping more water, on average, than they used to, and more hurricanes are making sudden leaps in intensity.

While cold snaps are becoming less frequent, even some cold extremes may be tied to climate change via rapid Arctic warming, as a recent study showed with the deadly Texas cold snap that knocked out much of the electricity grid last winter.

Yes, but: Not every type of extreme weather event is tied to climate change. Researchers don't know, for example, whether tornadoes are shifting in frequency or intensity in response to warming. 

What they're saying: "We are playing a game with chance that becomes more and more stacked against us with every ton of CO2 we emit," Claudia Tebaldi, a climate scientist for the Pacific Northwest National Laboratory, told Axios.

Andrew Dessler, a climate scientist at Texas A&M, warns that if we cross any number of unpredictable "thresholds built into the system" — for example, the water level in a reservoir drops so low that hydroelectric power shuts off — that could cause climate impacts to suddenly and dramatically increase in their impact on society.

"This is what keeps me up at night," he told Axios. 

Threat level: If the weather was this bad in 2021, that portends far more trouble for 2040 and 2050.

In the West, water scarcity, wildfires and heat waves are projected to worsen in coming years, potentially driving people away from the region. 

In the Midwest, a weather whiplash effect — with conditions swinging between drought and flooding — and more precarious agricultural conditions are in the offing. 

Across the South and Southeast, more powerful, rapidly-intensifying and wetter hurricanes could spin ashore. Heat waves will also be a greater concern.

And along the East Coast from Florida to Maine, a key task will be managing the impact of so-called sunny day flooding, when rising sea levels plus astronomical high tides cause flooding in sections of Miami, Charleston and Norfolk.

The bottom line: The future need not be a Hollywood dystopian hellscape. A combination of resilience measures to boost our ability to withstand extreme events, along with emissions cuts to rein in warming over the long term, can ensure that we avoid the worst-case scenarios.

1. The next 30 years of extreme weather

This year's events are just a transition to an even more turbulent future.

Illustration collage of burned paper framing an environmental scene with an evacuation route road sign

Deep Dive

This year&#x27;s extreme weather is a preview of even more turbulent times that will bedevil us for at least the span of a 30-year mortgage.Why it matters: Extreme weather events are the clearest way we&#x27;re feeling climate change in our daily lives, and they will reshape where and how we live, work and play.

Breaking climate science and policy coverage as extreme weather events reshape communities. Keep tabs on the race to a low carbon economy, which may be bumpy as governments, climate tech startups and major oil and gas companies race to find their niche amid the changing energy landscape.

Energy & Climate

For decades, companies have helped Wall Street, large retailers, major industries and other clients anticipate weather fluctuations, and the subsequent price and inventory volatility.

But the new era of extreme weather events has created a market for a different approach — and startups are filling it.

The big picture: The U.S. economy's ability to absorb extreme weather and climate shocks depends in part on how the business community, from big banks to big box chains to airlines and energy firms, incorporates risk management into their planning. 

It also requires new actions on the part of cities and states, as well as individual families. 

State of play: In recent years, money has begun pouring into startups that aim to help businesses get a better handle on their climate change-related risks. 

Already in 2021, this venture investment has reached a record $584 million globally, with most of the funding (about $437 million) concentrated in the U.S., per Pitchbook data. 

These companies' missions range from generating, collecting and analyzing data to more specific services like tracking supply chain vulnerabilities, agricultural forecasts and more. 

In the past, only insurance giants such as Swiss Re and Munich Re were out front on climate risk analysis and management — but now it's becoming an imperative for companies large and small.

Last year, a record 22 "billion-dollar disasters" hit the U.S., with at least nine so far this year, including Hurricane Ida. 

Zooming in: Investors ranging from Silicon Valley VCs to venture investors focused on adjacent industries to insurance companies are jumping in to write checks. 

Notable recent deals include London-based climate intelligence startup Cervest's $32 million Series A round in May, raising some of the funds from prominent investors Chris Sacca and Marc Benioff, as well as Jupiter Intelligence's $40 million Series C round last month.

The latter boasts contracts with federal agencies as well as major banks and cities, and is expanding into Asia. 

One weather and climate risk prediction firm, Tomorrow.io, recently announced plans to launch a fleet of satellites to improve its products, while others are investing in AI and machine learning to gain insights from massive datasets. 

Earlier this year, Moody's bought climate and natural disaster risk modeling company RMS for about $2 billion to bolster its climate risk analysis business. It also bought a majority stake in Four Twenty Seven, which measures hazards ranging from heavy rainfall to sea level rise, back in 2019. 

Between the lines: With the Securities and Exchange Commission and other regulators eyeing climate risk disclosure rules, there are questions about whether these companies' products will allow for apples to apples comparisons, or whether they'll use their own climate models, whose methods could be deemed proprietary and remain shrouded in mystery. 

The bottom line: The need for all businesses to navigate the weather going forward is as undeniable as climate change itself — and they'll pay for the best tools money can buy. 

2. The extreme weather risk-hedging industry

The new era of extreme weather events has created a market for a different approach.

Photo illustration of a house damaged by a hurricane behind ripped paper

Photo illustration: Sarah Grillo/Axios. Photo: Win McNamee/Getty Images

Climate change

For decades, companies have helped Wall Street, large retailers, major industries and other clients anticipate weather fluctuations, and the subsequent price and inventory volatility.<ul><li>But the new era of extreme weather events has created a market for a different approach — and startups are filling it.</li></ul>

Top stories & latest news on the Federal Reserve, real-time data, plus the biggest shifts happening in the U.S. and global economy.

Economy

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

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Major weather-related disasters by county

Some regions of the U.S. are safer from climate-fueled extreme weather events than others, but no region will be untouched, especially as greenhouse gases keep building up in the atmosphere.

The big picture: The map above shows major disasters declared by the Federal Emergency Management Agency during the past two decades — a snapshot that ranges from hurricanes and severe storms to wildfires and drought.

Climate change, scientists have found, is increasing the intensity — and in many cases the frequency — of these kinds of events. This is especially true when it comes to heavy rain or snow, heat waves and wildfires.  

Why it matters: The breadth is important. Some areas present well-known and documented risks — think coastal Louisiana's storm vulnerability or how 18 of the 20 largest wildfires on record in California have occurred since 2000.

But many other areas are experiencing their own extreme weather, such as this year's deadly flash flooding in Tennessee.

This year has also seen dangerous, thunderstorm-generated, strong wind events called derechos in the Midwest and record drought parching the West. 

Other metrics point to similar risks, and often in populous regions, such as the record-setting summer heat in Pacific Northwest cities.

What they're saying: "There is nowhere in the USA (or on Earth) that is totally risk-free from the impacts of climate change," said Brown University environmental studies professor Laurence C. Smith in an email exchange.

Yes, but: "[T]he inland mid-central and northeastern states along the Canadian border may experience some of these detriments somewhat less severely than other areas of the country," Smith said.

What's next: Limiting the future scope of extreme weather risks will require global emissions cuts to curtail global warming as much as possible.

But significant warming and extreme weather damage are already baked in, which requires risk management and adaptation decisions — personal and governmental.

Threat level: Michael Wehner, an expert on how climate change influences extreme weather with the Lawrence Berkeley National Laboratory, tells Axios via email that "as heat extremes continue to get hotter, work outdoors will have to be altered."

"Even now, it is critical that such outdoor workers have access to cooling stations, water, etc. to avoid heat stroke and other illness," he said, adding that shifting work hours to avoid peaks will become more important during heat waves.

The bottom line: Smith said he recently bought land in the Adirondack region of New York State — mainly for personal enjoyment and forest preservation, "but also with an eye to climate change."

3. There's no outrunning the risks of climate-fueled weather

Some regions are safer than others, but no place is free of risk.

Some regions of the U.S. are safer from climate-fueled extreme weather events than others, but no region will be untouched, especially as greenhouse gases keep building up in the atmosphere.The big picture: The map above shows major disasters declared by the Federal Emergency Management Agency during the past two decades — a snapshot that ranges from hurricanes and severe storms to wildfires and drought.

Property owners are now seeing the real, personal cost of climate change, as some homes are in danger of becoming increasingly expensive to insure — forcing  property values to plummet and turning interested buyers away.

Starting this month, new National Flood Insurance Program policies will no longer include subsidized plans that for decades helped prop up home values in some of the most dangerous flood zones. 

Existing policies may start to see changes in premiums in six months. 

Why it matters: Housing development and population density patterns will change as parts of the country become virtually uninsurable due to more frequent extreme weather events and rising sea levels.

Catch up quick: Lower-valued homes have been paying more than their share of the risk than higher-valued homes, and the Federal Emergency Management Agency says it can now "equitably distribute premiums" based on individual property flood risk and home value. 

In the past, premiums were essentially based on just two numbers — the elevation of the home and the elevation of a 100-year-flood event, which is the height of water during a flood that has a 1% chance of occurring in any given year.

FEMA’s "Risk Rating 2.0," announced in April, incorporates more risk variables than previous methodologies, including flood frequency, flood types, distance to water sources, elevation and costs to rebuild. 

The result: Under Risk Rating 2.0, premiums will better reflect flood risks and costs to rebuild. For homes with similar flood risks, lower value homes will likely pay less and more expensive homes in high risk areas will likely pay more. 

Yes, but: "You want to send the right market signal with the cost of insurance. You at least want people to understand the risks, [and] that the insurance costs a lot because the risks are high," Rob Moore, director of the water and climate team at the Natural Resources Defense Council, tells Axios.

As flood risks increase in the long term, older homes owned by less affluent people will be more likely to see premiums that rise faster compared to home values — an affordability issue Congress should address, says Moore.

As a result, "insurance can be part of a bigger solution," says Max Rudolph, a risk consultant, "that will keep people from developing in areas [where] the risk is much higher." 

In New Jersey, for example, the rate of sea level rise is about three times the global average. 

Even so, most of the more than 4,500 new homes (bigger and more expensive than previous ones) built after Hurricane Sandy were developed at a pace three times faster than those in safer areas. 

The big picture: Lenders, insurers and homeowners will have to start evaluating risks for the long term. 

Rudolph says buyers should ask themselves why they're interested in buying property with a 30-year mortgage when there's no certainty of its future value or existence given climate change. "And as the bank issuing the loan, why am I interested in writing that loan?"

"There's a lot of rules of thumb out there that need to be revisited."

What to watch: One in 10 American properties are now at significant risk of flooding, according to a Bloomberg analysis. 

There are now an additional 6 million properties in danger of flooding based on the new risk model, concentrated in the eastern half of the United States, particularly in Louisiana, Delaware and New Jersey. 

That number will increase by another 11%, or 1.6 million, over the next 30 years as populations grow in these areas, given current atmospheric warming conditions. 

Editor's note: This story has been updated to clarify Moore's comments about the new risk rating system and the impact of flood risks.

4. Homeowners face new risks and costs

Property owners are now seeing the real personal cost of climate change.

Photo illustration of cars and houses submerged in flood. 

Photo illustration: Shoshana Gordon/Axios. Photo: Tom Brenner/AFP via Getty Images)

Property owners are now seeing the real, personal cost of climate change, as some homes are in danger of becoming increasingly expensive to insure — forcing property values to plummet and turning interested buyers away.<ul><li>Starting this month, new National Flood Insurance Program policies will no longer include <a class="gtmContentClick" data-vars-link-text="subsidized plans" data-vars-click-url="https://www.nytimes.com/2021/09/24/climate/federal-flood-insurance-cost.html" data-vars-content-id="e25099e9-3cdd-4efd-8757-453d7340da26" data-vars-headline="Homeowners face new risks and costs" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://www.nytimes.com/2021/09/24/climate/federal-flood-insurance-cost.html" target="_blank">subsidized plans</a> that for decades helped prop up home values in some of the most dangerous flood zones. </li></ul>

With climate shock waves set to roil communities with increasing frequency and severity, an urgent task facing us all is to build up resilience measures to withstand these events. 

Why it matters: It's too late to stop extreme weather from increasing even as emissions are reduced, so all we can do is adapt to it. But there are strategies that you — and your community — can take to become better prepared.

Resilience means hardening our infrastructure — think of the electrical grid, roads and bridges — and our personal ability to anticipate and respond to such events, and recover from them.   

While extreme weather and the scientific warnings about it are frightening, they need not be paralyzing, experts told Axios. 

"A lot can be done to lower vulnerability and enhance resilience, while making people's lives better all around," said Claudia Tebaldi, a climate scientist with the Pacific Northwest National Laboratory.

Details: In much of California, residents have become accustomed to packing to-go bags filled with necessary items, key documents and mementos in case a wildfire encroaches. 

Similar steps are taken by residents in hurricane-prone areas ahead of the season's start on June 1. 

Part of becoming a more resilient society is better anticipating extreme weather events, and the federal government as well as cities, states and private industry are pouring money into infrastructure and businesses that can provide early warning capabilities.

5. How to adapt to extreme weather

There are strategies that you can take — and your community can take — to become better prepared..

With climate shock waves set to roil communities with increasing frequency and severity, an urgent task facing us all is to build up resilience measures to withstand these events. Why it matters: It&#x27;s too late to stop extreme weather from increasing even as emissions are reduced, so all we can do is adapt to it. But there are strategies that you — and your community — can take to become better prepared.